UBS uses artificial intelligence to deliver personalised advice to wealthy clients
Global banks are increasingly using technology to mine data for insight on customers that could give them an advantage over their competitors
UBS, facing the threat of competition from Google and Amazon, has turned to a Singapore-based technology company that uses artificial intelligence for help in delivering personalised advice to its wealthy clients.
Sqreem Technologies beat some 80 teams competing in the Innovation Challenge, a contest organised by Switzerland's biggest bank that offered S$40,000 (HK$235,000) and a potential contract to the winner. Their task: extract the information most relevant to an individual client from an explosion of data and deliver this tailored content to clients' mobile phones, iPads and other digital devices.
"Banking is one of the most rudimentary industries when it comes to digitalisation," said Dirk Klee, chief operating officer for UBS wealth management. "EBay, Amazon - everything is getting more and more digital. The question is how we translate this into a similar experience for our clients."
Big global banks like UBS are turning to technology to mine data for insight on its customers that could help lenders stay competitive in the digital era. The introduction of mobile payment systems offered by internet giants like Google and Apple has alerted traditional banks to the potential threat from tech companies with vast databases and the knowhow to exploit them.
More than 70 per cent of financial institutions in North America said big data analytics offered them a significant advantage over their competition, Cap Gemini said in a report this year. More than 90 per cent of them said successful big data initiatives would determine the winners of the future.
Five finalists vied to win over a panel of judges at the bank's offices in Singapore on November 28. Klee said the bank chose Asia as the venue because, in addition to being a hub for wealth management, clients in the region were more likely to use mobile phones and other digital devices to interact with the bank.
Sqreem was founded seven years ago by chief executive Ian Chapman-Banks, a technologist for 20 years, and Rene Raiss, a Columbia University graduate who spent 15 years on Wall Street developing algorithms for trading derivatives, including at Merrill Lynch. The company, which employs 15, counts Visa and DBS among its customers.
In a YouTube video, the founders show how they deploy a cloud-based computing engine driven by artificial intelligence to crawl through a wide range of openly available, unstructured data to find all possible combinations of the likes, interests and affinities of Singapore's six million-odd people, based on a list of 130,000 things that people do every day. Unstructured means the data has to be understood from its content, not as a result of it being organised in a database.
"We have identified over 85 million individual behavioural patterns that are engaged in by the people in Singapore," Sqreem says in the video. They include everything from food, vanity and travel preferences to deeper, more personal questions such as their aspirations and outlook on life.
Fine-tuned for financial services, the technology allows Sqreem to build a profile of an individual showing potential match-ups with different types of wealth management products.
In response to questions about privacy concerns, Sqreem said it designed the system to be fully anonymous. UBS would use Sqreem to match results with its own data on clients. "So at no point in time are we involved in identifying individual clients," Sqreem said.
UBS had "clear and strict data security standards and policies", the bank said.
Credit Suisse, UBS's smaller Swiss competitor, is expanding services to include a digital platform for its private bank clients that will also leverage big data, starting in Asia.